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July 2, 2013

M&A Roundup: United Capital Acquires Atlanta-Based PPA Advisors

In a busy week for mergers and acquisitions in the advisor space, United Capital continued its expansion into the Atlanta market with its purchase of a large stake in PPA Advisors. Also in M&A news, Envestnet completed its acquisition of Prudential WMS and Madison Dearborn Partners completed its NFP deal.

On Monday, fast-growing private wealth counseling firm United Capital Financial Advisers of Newport Beach, Calif., announced that it had bought the majority of the assets of Atlanta-based PPA Advisors. Founded in 1986, PPA Advisors is the second firm in Georgia to join United Capital in less than a year as the acquiring firm broadens its footprint in the Southeast by integrating established registered investment advisors into its national RIA platform.

PPA Advisors brings $224 million under management and an additional $122 million under advisement, along with a team of nine professionals, to United Capital. The office will be immediately rebranded as United Capital and managed under the leadership of four managing directors, all of whom are certified financial planners: Ross Ramsey, R. Corley Watson III, Randy Berry and Charles “Rocky” Costa III.

As of June 11, United Capital and its affiliates had approximately $17 billion in assets under advisement.

“We knew that by joining United Capital, we could create more value for our clients and gain a new dimension of financial planning, technology and investment resources from which our clients can benefit,” Ramsey said in a statement. “We have been welcomed into one of the most innovative financial advisory firms in the country, and look forward to being in a position to spend more time on what matters most—our interaction and dialogue with clients.”

United Capital will assist Ramsey and his fellow managing directors with operating structure and back-office needs. The opportunity to bring the Honest Conversations toolkit into the client wealth planning process was a big motivation for aligning with United Capital.

Envestnet on Monday announced that it has completed the purchase of the Wealth Management Solutions (WMS) division of Prudential Investments. The $33 million deal allows Chicago-based Envestnet to further build out its wealth management technology and services platform for investment advisors.

Envestnet acquired the assets of Prudential WMS for $10 million in cash upon closing, plus contingent consideration of up to a total of $23 million in cash to be paid over three years. Once the integration is implemented, Prudential WMS advisors and its primarily institutional client base will gain the benefits of Envestnet's “scalable” wealth management platform, manager research and broad product access, according to an Envestnet release.

“This combination of Envestnet's best-in-class technology and WMS' practice management leadership will help banks and bank trust departments of all sizes realize the full benefits of our unified and scalable wealth management platform,” said Envestnet Chairman and CEO Jud Bergman in a statement.

Bergman discussed the acquisition of Prudential WMS in an Investment Advisor magazine 2013 IA 25 profile, noting that most of Envestnet’s new advisor and enterprise relationships “are some kind of a conversion from a legacy” business model.

Prudential WMS, with approximately 90 employees, has more than 30 years of experience helping financial services firms develop their wealth management offerings.

Kevin Osborn, executive vice president and director of Prudential WMS, will join Envestnet as executive vice president to lead the new Bank and Bank Trust sales channel. As of March 31, Prudential WMS administered approximately $23.7 billion on behalf of institutional clients.

3) Madison Dearborn Partners Completes NFP Acquisition

National Financial Partners Corp. (NFP) announced Monday the successful completion of its acquisition by a controlled affiliate of Madison Dearborn Partners, a private equity investment firm headquartered in Chicago. NFP is a New York-based provider of benefits, insurance and wealth management services.

NFP stockholders will receive $25.35 in cash for each share of NFP common stock they own, in a transaction with an equity value of approximately $1.3 billion, which includes the full value of NFP’s convertible debt, according to the terms of the previously announced merger agreement.

The stockholders voted to approve the transaction at a special meeting held on June 19. With the firm now under private ownership, NFP’s common stock will no longer be listed or traded on the New York Stock Exchange.

The Madison Dearborn acquisition was announced on April 15. NFP on May 20 announced that President and COO Douglas Hammond would succeed Chairman and Chief Executive Jessica Bibliowicz as CEO. Bibliowicz is the daughter of former Citigroup CEO Sandy Weill. The firm released its first-quarter 2013 earnings on May 3, reporting net income of $4.2 million, or $0.09 per share, down from $5.6 million, or $0.13 per share, in the prior-year period.

Since Madison Dearborn's formation in 1992, the firm has raised six funds with aggregate capital of more than $18 billion and has completed approximately 125 investments. Madison Dearborn invests in businesses across a broad spectrum of industries, including financial and transaction services, among others. Noteworthy investments include CapitalSource, Nuveen Investments, PayPal, T-Mobile USA and TransUnion.